Back to the 1980s: Over-Priced Pentagon Spare Parts

It’s not the $7,600 coffee pot or the $640 toilet seat — those 1980s-era examples of Pentagon over-spending that even normal taxpayers like us could understand — but it’s close. On Thursday the Pentagon issued a summary of an investigation into Sikorsky helicopter parts bought by the Army and found:

The Army “did not effectively negotiate prices for 28 of 46 noncompetitive spare parts reviewed because neither Sikorsky nor [Army] officials performed adequate cost or price analyses of proposed subcontractor prices,” the report said. That language echoed phrases that brought back fond memories of Atari video games, Star Wars sequels, big-hair bands, and Rep. John Dingell berating a hapless General Dynamics executive for billing taxpayers $155 in kennel fees for his dog, Fursten. “Sikorsky also paid excessive prices to subcontractors (pass-through costs) and did not always provide the most current, complete, and accurate cost data (defective pricing).”

Now pay attention: here comes the best part:

From the Pentagon IG:

We calculated that Sikorsky charged the Army $11.8 million or 51.4 percent more ($34.7 million versus $22.9 million) than fair and reasonable prices for 28 parts. If prices are not corrected, [Army] officials will pay excessive profits of approximately $16.6 million over the remaining 2 years of the contract. During the audit, Sikorsky agreed to provide refunds of about $1.0 million.

Again, edited this time, in case you missed it:

We calculated that Sikorsky charged the Army $11.8 million or 51.4 percent more ($34.7 million versus $22.9 million) than fair and reasonable prices for 28 parts…excessive profits…During the audit, Sikorsky agreed to provide refunds of about $1.0 million.

A third time, for the slow ones among us:

Sikorsky charged the Army $11.8 million or 51.4 percent more ($34.7 million versus $22.9 million) than fair and reasonable prices for 28 parts…excessive profits…Sikorsky agreed to provide refunds of about $1.0 million.

For the math-challenged set:

Sikorsky charged the Army $11.8 million…more…than fair and reasonable prices…excessive profits…Sikorsky agreed to provide refunds of about $1.0 million.

So much for the IG. Battleland speaking here: so the company pockets $12 million in excessive profits and repays $1 million? If something is wrong with Battleland‘s math, we’re sure Sikorsky will tell us. But it sure helps explain the Pentagon’s $700 billion annual budget, the nation’s $14 trillion deficit, and the high hourly operating costs of Sikorsky helicopters.